Now all that's left is Apple. The U.S. Justice Department says it will continue to litigate against the electronics giant for conspiring with Macmillan and four of the other largest U.S. book publishers to raise e-book prices.
Shara Tibken
by Shara Tibken
February 8, 2013 8:02 AM PST
The U.S. Department of Justice has reached a settlement with Macmillan in an antitrust case related to e-book pricing, leaving only Apple to battle the suit.

In an antitrust lawsuit filed last April, federal prosecutors accused Apple and five book publishers of conspiring to artificially hike prices. The same day, the Justice Department announced it had reached settlements with three publishers but said Apple and the other two publishers had opted to fight the charges. Lagardere SCA's Hachette Book Group, News Corp.'s HarperCollins Publishers, and Simon & Schuster (owned by CBS, which publishes CNET) agreed to settle.

Penguin, one of the two publisher holdouts, reached a settlement in December. Macmillan, formally known as Holtzbrinck Publishers LLC, was the last publisher to settle with the DOJ. The DOJ said today that it will continue its suit against Apple.
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As with the other settlements, Macmillan agreed to immediately lift restrictions it had imposed on discounting and other promotions by e-book retailers. It also will be prohibited from entering into new agreements with similar restrictions until December of 2014.

The proposed settlement agreement also will impose a strong antitrust compliance program on Macmillan, including requirements that it provide advance notification to the Justice Department of any e-book ventures it plans to undertake jointly with other publishers and regularly report to the department on any communications it has with other publishers. Also for five years, Macmillan will be forbidden from agreeing to any kind of most favored nation provision that could undermine the effectiveness of the settlement.
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Macmillan CEO John Sargent said in a letter posted online that the company ultimately settled "because the potential penalties became too high to risk even the possibility of an unfavorable outcome."
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That could be a perfectly reasonable decision, even if you thought you would win.
(In this case it isn't, but in general.)
If the potential losses are high enough, even a very small percentage chance of losing might be too high to risk.
In reality, it doesn't seem like settling loses them much, as they have realised that they can't survive as the only publisher selling books at a higher price than everybody else, so even if they won in court, what would it actually get them?
Agency pricing only worked when everybody did it, it makes no sense to do it all on your own. (That is why they conspired to do it together!)